Before his speech in New Hampshire on Tuesday, President Obama visited a small technology company in Nashua called ARC Energy. During his talk, he promoted ARC Energy as an example of the kind of innovation he wants taxpayers to subsidize with what he called “seed money” in the form of federal “green jobs” funding. We need to do it, he said, so we can get ahead of the Chinese.
Probably few in the audience knew what the people who founded ARC Energy only two years ago know: ARC received no federal startup money. Dr. Kedar Gupta and his wife founded the company with their own money, the same way Dr. Gupta co-founded GT Solar, the world’s largest maker of photovoltaic cells, in the 1990s.
Obama presented a narrative that was fundamentally false – namely that, without federal “seed money,” our technology sector won’t advance quickly enough to beat the Chinese. But guess where ARC Energy sells many of its products? China.
That sleight of hand was typical of Obama’s speech. The main point of his presentation was to tout his plan to pump $30 billion into small banks for the stated purpose of providing them with enough money to lend to small businesses. But that cannot possibly be the real goal of the program, for several reasons.
First, community banks are not short of cash for lending. According to Stephen Wilson, the chairman-elect of the American Bankers Association, they aren’t lending because federal bank regulators have forced them to tighten their standards. “Obama is calling us ‘fat cats’ and telling us to be lending more, and then he sends his bank examiners and regulators to stifle our lending,” Wilson told the Cincinnati Enquirer last month. If Obama wanted to free up cash for small businesses, he could have his regulators back off and let small banks lend.
Second, if Obama were really interested in freeing up more money for lending, why is he proposing to tax large banks? Wells Fargo, one of the large banks Obama wants to punish with a new tax, is the largest small-business lender in America. It expects to loan $16 billion to small businesses this year. Bank of America projects a similar figure.
Those two banks alone would lend about as much (more, if the economy improves) to small businesses this year as the $30 billion Obama wants to spread among smaller banks. But rather than make it easier for them to lend, Obama is making it harder by proposing to tax them simply for being large and by having his regulators restrict their ability to take risks. By encouraging banks to build up larger cash reserves, Washington is reducing the amount of money available for lending.
Clearly, Obama’s interest is not in freeing up money for small businesses. The only explanation for his behavior — taxing the largest banks and distributing money to smaller ones — is that he wants to use the power of the state to shift assets (and, thus, power) from large banks to smaller ones.
This is purely an ideological crusade. Obama believes that large banks are generally a bad thing, and small ones are generally a good thing. So, he’s taking from the large and giving to the small. It’s economic idiocy, but in his mind it’s a morally just cause.
What Obama did in New Hampshire is the same as he has done for the past year, and on the campaign trail before that. He presented a façade of an argument to justify actions Americans would not possibly support were he to state their real motives. It’s exactly how he tried to sell health care reform (it’s vital to economic recovery!), his massive transfer of wealth from private producers to government employee unions (it’s shovel-ready stimulus!), and his cap-and-trade bill (it will create green jobs!).
If we take any lesson from his New Hampshire “town hall” event (it wasn’t a town hall meeting), it is that we must ignore what the president says his proposals are intended to do and scrutinize what they actually do. More often than not, we will find that they simply transfer wealth and power from people and groups Obama dislikes to those he favors.
Every American should know the truth
No one should miss this video:
http://xrl.us/bf29mb
Look to the end ( 10 min.)
Mr. Cline,
Your article clearly identifies the general subtext that is present in virtually all of President Obama's so-called Stimulus programs. One factor similarly common to his programs is the hook, on which each entity receiving funding will be caught. Each business must remain on the lookout for what hidden production and emssion controls exist or what requirements for the use of organized labor only or stipulations for employee health care coverage, and any numerous Obama agenda items, which go along with taking the money.
[...] Failure Writ Small Obama’s speech in New Hampshire this week sums everything that’s wrong with the administration. [...]
[...] Read more at FrontPage Magazine. [...]
So Obama is going to free up the loans to small businesses?
The Banking System Doesn’t Need More Money
As a small business owner with a lot of friends who also own small businesses, I get tired of hearing all the news stories about how small business lending is going to get a shot in the arm from President Obama’s programs or any other source in the foreseeable future. Yesterday I listened to a speaker from one of the large banks talk about how many loans the bank was making, doing its share to get the country moving again. All the banks are simply not making business loans unless they are absolutely gold-plated. Period. This isn’t because they don’t want to make loans; it’s because they’re being criticized by examiners.
The regulators have made it clear to banks that they will be criticized for any loan where the borrower takes out any cash, regardless of the underlying fundamentals or collateral. This is nonsensical.
I understand that real estate is depressed, and that values are uncertain, and that tenants are moving, and all the other fundamentals.
The answer is simple: The regulators need to relax—not on every loan, but use some common sense!
I feel for all the small businesses in America that are crippled. They dont understand why their debt free building isnt worth anything for collateral on a loan, or why their receivables which have deteriorated only slightly are now not worth anything as collateral.
Here’s the simple truth from one of the “little guys” in a small business who sees the misery here in the street, and just can’t relate to our government’s plan to put more money in the system. There is plenty of money out there; someone just needs to stop sitting on it, after the regulators tell them it’s ok to lend some with solid underwriting policies.
This story has been truncated, see the whole story at: http://www.mrmissionpossible.com/blog/auto-salvag…
Ron Sturgeon
5940 Eden
Ft. Worth TX 76117
It is obvious that a fight exists between liberals and conservative ideals. The fact that most conservatives trusted those they voted to represent them were actually part of the socialized conspiracy is disheartenjing. Now, we have a mess and a total lack of remorse from those exposed for who they really represented. Let the record speak on their behave, then let them pile on more excuses.
Quite reprehensible and a bit hard on the digestive system.
Robert, you post this everywhere, its annoying
Robert Bernier · 1 day ago
Every American should know the truth
No one should miss this video:
http://xrl.us/bf29mb
Look to the end ( 10 min.)
Obama is spreading the wealth, I know it is fact by……
*** OBAMA TOILETE PAPER SALES UP 355 % ***
The more he does …. the more is used.